With a double digit comparable sales decline, the second quarter proved difficult for Sears Holdings and its store network. The struggling retailer also said it would close 28 more Kmart stores.
Comparable sales declined 11.5% in the second quarter, with Sears comps down 13.2% and Kmart comps down 9.4% versus the period a year prior. Sears has been scaling back pharmacy and electronics operations and said, with results adjusted for those developments, Sears comps declined 12.1% and Kmart comps declined 6.8% compared to the second quarter of last year.
The company’s net loss was $251 million, or $2.34 per share, versus $395 million, or $3.70 per share, in the 2016 quarter. Adjusted loss per share, excluding one-time charges, was $1.16 versus an adjusted loss per share of $2.03 in the year-previous quarter. Sears Holdings’ net loss was smaller than the analyst average estimate $2.48 net loss published by MarketBeat.
Total revenues were $4.37 billion versus $5.66 billion in the year-earlier quarter while merchandise sales declined to $3.5 billion from $4.65 billion in the period from a year before. Operating loss was $106 million versus an operating loss of $269 million in the year-earlier quarter.
Edward Lampert, Sears Holdings chairman and CEO, said, “We are making progress on the strategic priorities we outlined earlier this year and remain focused on returning our company to profitability. The comprehensive restructuring of our operations is delivering cost efficiencies and helping drive improvements to our operating performance. While the third quarter has historically been our most difficult quarter over the past several years, we are working towards making meaningful improvement in our performance this year as a result of the restructuring actions we have put in place, and our continued focus on the expansion of our Shop Your Way ecosystem.”
Rob Riecker, Sears Holdings CFO, noted, “During the quarter, we continued to focus on actions to provide the company with additional financial flexibility to generate liquidity and demonstrate our ability to manage our business while meeting all of our financial obligations.”
Those initiatives included generating net cash proceeds of about $460 million from real estate transactions. Sears Holdings’ revolving credit facility stood at $191 million on July 29.
The company said that in fiscal year 2017 it has closed about 180 stores with an additional 150 expected to shutter by third quarter’s end. The company also said it would notify employees at 28 Kmart stores that those operations would close later this year.